The Constitutional Court in the case (Rikors numru 22/19 GM) Joseph Grima, Georgina Grima, u Doreen Grima v L-Avukat Ġenerali u Lawrence Aquilina u Iris Aquilina has decided on two appeals, one filed by defendants Aquilina and the other appeal filed by the Attorney General (today the State's Advocate) following a decision of the First Hall of the Civil Court dated 10 October 2019 ("the Decision").
The Decision had found an infringement of article 37 of the Constitution of Malta and articles 14 and Protocol 1 of the European Convention for the Protection of fundamental human rights. The plaintiffs in this case had requested the Court to declare and decide that Chapter 69 of the Laws of Malta which granted the defendants the right to renew the lease violated the fundamental human rights of the plaintiffs as envisaged in article 37 of the Constitution of Malta and the First article of the First Protocol of the European Convention (First Schedule of Chapter 319 of the Laws of Malta) and article 14 of the said Convention. The plaintiffs requested the Court to give them the remedies together with the eviction of the defendants and damages, arguing that Chapter 69 did not create the right balance between the landlord and the tenant, given that the rent paid by the defendants did not reflect the market prices of the leased property. The Decision decided in favour of the plaintiffs and ordered the Attorney General to pay the amount of Eur35,000 by way of compensation for damages.
The Constitutional Court noted that through the entry into force of Act X of 2009, the landlords' position has improved, for instance through gradual yearly increases and the limited rights with respect to the inheritance of the lease. Yet, the Constitutional Court observed that there is still a wide discrepancy between the rent as contemplated in the law when compared to the rent that the same property can fetch in the open market. The Court cited the case Cassar v Malta (Applikazzjoni numru 50570/13) and said that the rent payable in this case is 'manifestly unreasonable".
The Constitutional Court held that Chapter 69 of the Laws of Malta does not strike the right balance between the interests of the landlord and those of the tenant. This was also reiterated by the Court of first instance. The increase in rent as envisaged in Chapter 69 is still low when compared to the value of the property as valuated by the court expert. Therefore, Chapter 69 and Act X of 2009 do not follow the proportionality principle. The court noted that despite a line of case law on this matter, the House of Representatives has not yet legislated to establish balance between the rights of the landlord and the social interest intended to protect tenants who do not have the financial means to pay the rent as per market value. But the fact in itself that the tenant has a financial difficulty to pay an increase in rent does not mean that the landlord has to suffer this burden himself indefinitely.
The Court observed that the rent laws reflect a legitimate social purpose. In this case, the defendant lives alone and is pensioner of over sixty-five years of age. Furthermore, the defendant has always lived in this property. Although there is the element of uncertainty when the landlords can take back the property, yet they know that as a fact that there is no possibility that any other person is protected by the law to benefit from the lease after the property is vacated by the defendant. The Constitutional Court also added that through the amendments of Act X of 2009, the tenant is obliged to pay for the internal expenses of the property as they may arise (Article 1531E of the Civil Code).
To this effect, the Constitutional Court rejected the appeal of appellant Aquilina, acceded partially to the Attorney General's appeal and modified the decision of 10 October 2019, in the sense that it rejected the plaintiff's claim that the special law is infringing the fundamental rights under Article 37 of the Constitution and article 14 of the Convention; reduced the compensation to be paid to the plaintiffs from Eur15,000 from the amount of Eur35,000 which was awarded by the first court, which amount is to be paid by the Attorney General, with 15% interest.
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